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Indian economy showing signs of growth
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Bikky Khosla | 02 Feb, 2010
December recorded a positive growth for the second month in a row as exports grew 9.3 percent, an indication that the country's trade was coming out of the economic blues. The rapidly improving exports that grew for the second successive month can be seen as the result of normalcy being restored after years of wilderness due to global economic meltdown.
Another good indication is imports - particularly that of capital goods and industrial inputs - back to the positive terrain since the financial crisis. The rise in imports of capital goods and industrial inputs reflect an increase in manufacturing and investment activity in the country, which is indeed good news.
However, the Reserve Bank of India's decision to hike banks' cash reserve requirements was higher than what the industry and exporters had expected. Although RBI had to take the measure to check mounting inflation, I think we have to strike a balance between measures required to contain inflation and those which can insulate growth.
At a time when we are witnessing a gradual growth of the economy, an increase in interest rates is the last thing the industry will be able to take. I think banks should absorb the recent hike without increasing the interest rates which will otherwise impact the economic growth. India's Interest rates are already much above the international benchmark and an increase in prime lending rate will give a major jolt to the industry, especially SMEs.
The coming months will be crucial for both the industry and decision-makers and any decision taken will a have long-term impact. Let's just hope that we take the best decisions.
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Indian Economy on the path of Growth
Harish Arora | Tue Feb 9 04:23:09 2010
Dear All,
I completely agree with Mr Khosla. While RBI has to take certain measures to control runaway inflation, it should however not overlook growth. Like Mr Khosla said a balance between the both is very essential in today's context. After two years of slump we need measures that can spur growth than anything else.
Economy and interest
David Doehlert | Sun Feb 7 02:07:37 2010
Sir, I respect your thoughts on interest and business. Interest and humanity has been ignored for a time, and could help
restore economy. I think that with Interest rates near zero, people may put their Rupees in the mattress rather than the bank. It would truly help people be interested in the economy if they had a stake. This stake would also help bank reserves! I agree that balance is important. But think that a few Rupees from a billion people could go a long way if they had slight bit of personal investment in it. My Best Regards, (as a small businessman in a large world)
Things moving in Upward Direction For us!
Anupma Sancha | Fri Feb 5 08:18:07 2010
Sir,
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Anupma Sancha
Managing Director
GLITZ EVENTS INDIA PVT LTD
06542-232327
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